Diplomacy Politics

China’s Man in the Maldives

Yameen and Xi

Maldives’ President Abdulla Yameen and China’s President Xi Jinping listen to the national anthems during a welcome ceremony at the Great Hall of the People in Beijing on December 7, 2017

This month the Supreme Court overturned verdicts against nine opposition figures, including former President Mohamed Nasheed, and reinstated 12 opposition members of parliament. President Yameen promptly declared a state of emergency and detained two justices of the court. Police also arrested the President’s half-brother, who ruled the country as the dictator from 1978 to 2008.

Officials claim they foiled a plot to overthrow the government. A more plausible explanation is that Mr Yameen’s erratic behaviour and cosiness with China caused dissent in ruling circles. Elections were due later this year, and the opposition was expected to do well.

As part of President Xi Jinping’s Belt and Road Initiative, Beijing granted loans and sent state-owned companies to develop Maldive ports and other public works. A new International Monetary Fund report projects the Maldives’ external debt will hit 51.2% of GDP in 2021 from 34.7% in 2016 as a result of the projects.

Now in exile, Mr Nasheed accuses the government of allowing a Chinese “land grab” of at least 16 islands and says Chinese loans for three projects account for nearly 80% of national debt. He wrote in an Indian newspaper earlier this month: “The cost of these projects to the Maldives are outrageously inflated, allowing regime cronies to line their pockets, while future generations of Maldivians are saddled with gigantic debts they will never be able to repay.”

The IMF says the cost of servicing the external debt will average $92 million a year for four years—though the government’s total revenue is only about $1 billion. If returns on the projects fall short, the Maldives may find itself like Sri Lanka, which built the port of Hambantota with Chinese loans. In December Sri Lanka turned over operation of the port on a 99-year lease to a Chinese state-owned company to avoid default. Pakistan likewise lost control of Gwadar port to China for 40 years.

India is naturally concerned that China could use the Maldives ports to expand its military presence in the Indian Ocean. Three Chinese navy ships visited last year. India’s economic ties with the Maldives are also being eclipsed. In 2012 the Yameen administration terminated a contract with an Indian company to renovate the country’s airport in favour of a Chinese company. Last year the government pushed a trade agreement with China through parliament without debate, eliminating tariffs on 95% of Chinese goods over eight years.

Beijing doesn’t seem to have attached any strings to its support for Mr Yameen, but it also doesn’t mind his authoritarian turn. The Chinese Foreign Ministry recently warned against foreign interference in Maldives’ affairs, in contrast to India and other countries that called for ending the state of emergency and returning to the rule of law.

Xi Jinping’s Belt and Road Initiative puts the expansion of Chinese power and influence above all else, and the Maldives is an example of the collateral damage. U.S. Secretary of State Rex Tillerson has called China’s practices “predatory economics,” and too often that’s right.

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Source URL: Google News

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